Auditing and Ethical Practice



Executive Summary

This assignment is based on the applicable auditing standards (ASA) in Australia. Auditing standards are compulsory indications that auditors must comply in performing their audit functions and present personal and professional requirements of the auditor. The audit is financial activity involving the review and verification of accounting information disclosed by the companies. The Australian Auditing Standards are fundamental principles to audit the company performance during the audit process. The manipulation of the acceptable auditing principles on the global level lead to the development of global financial crisis. In recent years, the financial crises have questioned the work of the auditors, the financial profile scandals have occurred in companies that had been receiving the professional service of auditing.

Auditing and Ethical Practice

Introduction

The Australian Auditing Standards are fundamental principles to audit the company performance during the audit process. Compliance with these standards ensures the quality of the professional work of the auditor. Australian Auditing Standards consist of a set of 10 standards adopted by the Certified Public Accountants and oblige its members to ensure the quality of auditors. In this sense the audits can be done on any type of activity. The audit of financial statements includes examining the information by an independent auditor issuing entity. The purpose of this test is to determine whether they were prepared in accordance with accounting standards applicable in each country or region. Once the procedures, the auditor may consider appropriate, should issue an opinion on whether the financial statements present fairly the financial and economic reality of the audited entity (Griffiths, 2005).

It is my view that he auditing procedures must be established which are low cost, consistent, non-threatening and can be delivered in remote areas. Issues to be considered include the selection of auditors, training and skilling, and ensuring consistent application of assessment values.

One of the largest non-bank lenders collapsed due to the global financial crises. After the collapse of Banksia Securities, thousands of farmers and the State of Victoria savers fear for their investments, their total amount is around $660 million. The collapse of the Institute took place in the wake of a known lousy credit model based on the allocation of long-term debt over short-term funding. The sign of a collapsing housing market, according to the Australian model of the USA could hardly be greater.

I perceive that the manipulation of the acceptable auditing principles on the global level lead to the development of global financial crisis. The global financial crisis of 2007 was comparatively recent in origin as compared to other financial crises, and is possibly persistent until now. It was triggered by increasing defaults on subprime mortgages and the disruption of the markets for mortgage-backed securities. The financial crisis took root in the United States of America, and spread to the United Kingdom and other countries the world over. There were numerous things that lead to the financial crisis like the process of globalization that has been occurring since the part thirty ...